The 5-step method to maximize the value of your online customers
Most businesses online approach marketing it like this: “We’ll attract people to our website → They’ll see how awesome we are → They’ll buy.”
Others, focus more on leads: “We’ll generate as many leads as possible → We’ll grow our list considerably → We’re gonna send them emails until they buy.”
It makes sense, however this approach is one-dimensional as you can see. It focuses on one metric: The amount of incoming visitors or incoming leads. As if when these numbers are high, all these people will automatically love us and become customers.
Where I’m getting at, is that the metric that matters is only one: revenue.
Once you realize that, ask yourself: What is the best way to maximize revenue?
Having said that, we start considering: Maybe, to increase our revenue, it is wiser to invest in a system that consistently maximizes the lifetime value of existing customers.
This article is about that system, and it involves 5 steps:
- Determining market fit
- Generating leads
- Turning leads into a buyers
- Turning buyers into multiple purchasers
- Re-engaging lost customers
Determining market fit
What is the gap you are filling in the market with your product/service?
Is there a real need for your product?
Before you invest in promoting your product you have to have the answers to these questions.
Market research can show you if there is a need. If there is no evidence that people need your service, then think twice before launching any product. If there is a need, then see if competition already covers these needs. If it does, then creating a me-too product against an established competition will not get you very far.
In this case you have to set yourself apart from the competition by
- Creating and articulating a unique offering
- Targeting a very specific audience that will benefit the most from your services
- Positioning yourself against the established competition and demonstrating that you’re not offering just another me-too product
Before someone becomes a customer, they have to get to know you and trust you. The most effective way to start this conversation is with a free “lead magnet”. A highly specific chunk of information made to attract attention that is used in exchange for an opt-in.
A Lead Magnet should:
- address a highly specific problem of your market
- be highly actionable
- be easy to consume
- have high perceived value
- have high actual value, given its free price
Examples of Lead Magnets
Some examples of typical Lead Magnets include: checklists, case studies, software trials, free tool downloads, quizzes, tests and assessments.
Notice how I didn’t include ebooks? That is because an “ebook” is usually not so easy to consume, which is an important characteristic of a good Lead Magnet.
Finally, using Lead Magnets is a good way to qualify your leads and start doing segmentation (especially if you have more than 1 lead magnet).
Turning leads into buyers
You now have leads. People start noticing you and appreciating the value that you give for free. Your aim now should be to turn those leads into buyers.
You do that by creating what we call “Tripwire offers”.
Tripwire offers are super irresistible offers and it makes no sense NOT to buy if you are a “qualified lead”, as they provide clear value at a very very cheap price.
The purpose of the offer is to change the relationship between you and your leads: To turn prospects into paying customers.
For that reason, the price should just cover the cost of the product. You should not expect to have any profit from the tripwire transactions. The profit will come later, because once even a cent comes out of the pocket of your prospect, guess what…
The relationship is forever changed! In their minds you are now someone who deserves to get their money.
Examples of Tripwire offers
A typical way to create a tripwire offer is to cut out a “chunk” from your core offering and sell it separately for a low price. If you’re selling an online course for example, you could sell a module of the course by itself. If you’re selling consulting services, it could be some kind of business audit.
A Tripwire could easily be an ebook or -even better- an actual physical book.
A Tripwire could be a complementary product to your core offering. How about offering cool guitar pics, before selling a guitar?
Finally, a famous tripwire offer from the past is Columbia House Records that once offered 10 albums for 1 cent.
Turning buyers into multiple purchasers
They got your Lead Magnet.
They got your Tripwire.
Now of course you’re in a good position to sell your core offering (the thing you wanted to sell to them all this time, before reading this article).
I am assuming you did that. I trust you.
That’s not the end of the journey though. We said that we want to maximize the customer lifetime value, and at this stage we can do it by incorporating “Profit Maximizers”.
Examples of Profit Maximizers
- Cross-sells: Cross selling is selling related or complementary products to customers who bought a certain product. Usually these products are in a very similar price range. Think of selling a guitar amplifier to guitar buyers. Or selling shaving cream to people who bought razors.
- Upsells: Up-selling is the practice of selling a higher value service/product to people who bought a certain product. Think of upgrading a SaaS product to the next tier. Or selling a suit to a shirt buyer.
- Subscription services: Subscription services are a big opportunity for maximizing profit as you can create recurring income from services as well as physical products.
- High ticket items: This is usually the “big offer” for most businesses. It shouldn’t be used as the main offer, but rather be promoted only to the most loyal buyers, in order to maximize their value.
- “Slack Adjusters”: Starbucks sells mostly coffee and snacks. Low value stuff. However, in some stores you can even buy an espresso machine that could cost between $500-$1000. How many people will buy that? Less than 1%, right? But this 1 person who will buy it, is worth 100s of times more to Starbucks than the typical customer does.
That’s a high-ticket item, on steroids. It is much easier to create Slack Adjusters if you are in the services business and you should always have this option for your customers, because…why not?
Re-engaging lost customers
Of course, not all visitors will want to go down your sales funnel and jump through all these hoops, becoming a loyal customer.
That’s the bad news. But I guess you knew that.
The good news is that you can get many of them back and gradually move them from stage to stage down the funnel:
From visitors to returning visitors.
From returning visitors to leads.
From leads to customers.
There are 3 main ways you can make people return and continue their path down your funnel:
- Automated follow-ups: Once somebody is a lead, you can use email marketing and with targeted personalised messages you can get them interested and make them come back to your website and buy
- Exit offers: These pop-up offers that appear every time we try to exit the page may be annoying for some people. I understand that. However they are extremely effective in getting some other people to stay on your page or subscribe. It’s a numbers game.
- Remarketing: Advertising tools like Facebook and Google Ads have the capability to track website visitors and display relevant ads at a later time via sponsored social posts or website banners. Use it!
Essentially, what you want to build a customer experience as a product ladder, where you want to gradually introduce new offers as their awareness and customer loyalty increases.
This requires a very methodized approach to how you structure your website, your marketing strategy and your business in general.
And once again: marketing is not about maximizing “leads”. It’s not about maximizing “visitors”. It’s not about maximizing “downloads”. It is about maximizing money. This is how you should always approach it.